Question

___________ is one of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.

Answer 1

Answer: Future value

Explanation: The time value of money concept specifies the change in value of money with the time period.

In simple words, future value is the amount of money that an individual will get at a specific date in future, if he invest the money today at current interest rates. The interest rates may change in future so one cannot predict it properly. However, assumptions could be set regarding the cash flows and interest rate.

Hence, from the above we can conclude that the correct answer is future value.